Claims that Spanish mortgage lenders misled borrowers
Claims that Spanish mortgage lenders misled borrowers
Property investors who have taken out a Spanish mortgage may have been misinformed over the requirements. A new report claims that Spanish mortgage lenders regularly oblige borrowers to take out unnecessary products.
Spanish Property Insight reports on a study carried out by María Martínez, professor of civil law at the University of Zaragoza.
According to the report, anyone investing in
property in Spain may have been intentionally misled by their
Spanish mortgage lender. At present the law only requires mortgage borrowers to take out fire insurance, but lenders are said to be imposing other products as conditions for approving a mortgage.
"Not only is this not obligatory, it is
against the law to oblige clients to take out such products," Martínez writes.
She claims that borrowers may have had to take out, amongst others, life insurance, unemployment insurance and temporary incapacity insurance.
"Banks get greater guarantees and higher margins from
additional products, all of which have to be paid for by consumers. Furthermore they also get the [mortgage opening] commission."
By imposing such requirements, the cost of
buying a property in Spain is driven up. Conveyancing costs tend to increase from 10 per cent to 20 per cent of the property purchase price.
This story was brought to you by holiday
lettings.co.uk, the UK's No.1 holiday home website.
Related Stories
Buy-one-get-one-free on the Costa del Sol
Property prices in Spain may fall by up to 50 per cent in coming years
Beckhams slash £2m off Madrid mansion to try and sell it
30 October 2008
Print this article
